Our insane zoning policies cost the economy $1.5 trillion in lost productivity annually:
According to a recent paper by the economists Chang-Tai Hsieh, from the University of Chicago’s Booth School of Business, and Enrico Moretti, from the University of California, Berkeley, local land-use regulations reduce the United States’ economic output by as much as $1.5 trillion a year, or about 10 percent lower than it could be.
The problem is especially severe in coastal cities, where zoning policies limit the supply of housing. Based on the cost of materials and local wages, a house in San Francisco should cost less than $300k. But due to artificial land-use restrictions, prices are actually around $1 million. And there is little incentive for local government to lower the price of housing.